When Chinese Stock Fraud Was Rampant

The new documentary The China Hustle explores the recent period when fraudulent U.S.-listed Chinese companies were all the rage.

By

Bill Alpert

March 21, 2018 3:10 p.m. ET

Before U.S. investors could get their hands on big China stocks like Tencent Holdings (ticker: 0700.Hong Kong) or Alibaba Group Holding (BABA), the way to ride China’s economic boom was to buy a reverse-takeover stock.

Back in the aughts, hundreds of Chinese companies got instant U.S. listings by merging into a public, but moribund, U.S. company and then ringing the market’s opening bell. The fad saw some $50 billion worth of these deals launch before investors learned that many of the China reverse-takeover firms were frauds....